17

- 308

- cv

C itigroup Glob. M kt s ., Inc. v. KLCC Invs ., LLC, et al., D and D Trust

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

SUMMARY ORDER

R ULINGS BY SUMMARY OR DER DO NOT HAVE PREC EDENTIAL EFFECT

. C ITATION TO A SUMMARY

ORDER FILED ON OR AF TER J ANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY F EDERAL R ULE

OF A PPELLATE P ROCEDURE 32.1 AND THIS COURT ' S L OCAL R ULE 32.1.1. W HEN CITING A

SUMMARY ORDER IN A D OCUMENT FILED WITH T HIS COURT

, A PARTY MUST CITE EITHER THE

F EDERAL A PPENDIX OR AN ELECTR ONIC DATABASE ( WITH THE NOTATION " SUMMARY ORDER "). A

PARTY CITING A SUMMA RY ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTE D

BY COUNSEL

.

At a stated term of the United States Court of Appeals for the Seco nd

Circuit, held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in

the City of New York, on the eighteenth day of December, two thousand seventeen.

PRESENT: BARRINGTON D. PARKER

, GERARD E. LYNCH

, DENNY CHIN,

Circuit Judge s.

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x

CITIGROUP GLOBAL MARKETS, INC.

, Interpleader Plaintiff

- Counter

Defendant

- Appellee

,

v. 17

- 308

- cv

KLCC INVESTMENTS

, LLC,

Interpleader Defendant

- Counter

Claimant

- Appellee

,

KENNETH CAYRE

, Third

- Party

- Defendant

- Appellee

,2 D AND D TRUST,

Interpleader Defendant

- Counter

Claimant

- Third

- Party

- Plaintiff

Appellant. *

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x

FOR INTERPLEADER PLAINTIFF

- JOHN EVAN JENKINS, III, Lubiner , Schmidt

COUNTER

- DEFENDANT

- APPELLEE : & Palumbo , LLC, Cranford, New Jersey.

FOR INTERPLEADER DEFENDANT

- M. RYAN PINKSTON ( Richard M. Resnik, on

COUNTER

- CLAIMANT

- APPELLEE the brief ), Se yfarth Shaw LLP, San Francisco,

AND THIRD

- PARTY

- DEFENDANT

- California, and New York, New York

. APPELLEE :

FOR INTERPLEADER DEFENDANT

- EUGENE KILLIAN, JR., The Killian Firm, P.C.,

COUNTER

- CLAIMANT

- THIRD

- New York, New York

. PARTY

- PLAINTIFF

- APPELLANT :

Appeal from the United States District Court for the Southern District of

New York ( Preska

, J. ).

UPON DUE CONSIDERATION, IT IS HEREBY ORDERED,

ADJUDGED, AND DECREED that the orders of the d istrict court are AFFIRMED

.

Thi s interpleader action was filed in the district court below in 2006 by

interpleader plaintiff Citigroup Global Markets, Inc. ("Citigroup"), the holder of a n

account containing securities pledged as collateral

-- twice

-- by non

- party Solomo n

Dwek

. By memorandum and order entered September 28, 2015, the district court

granted summary judgment in favor of KLCC Investments, LLC and Kenneth Cayre

* The Clerk of Court is respectfully directed to amend the official caption to conform to

the above.3 (together "KLCC"), dismissed the crossclaims of D an d D Trust (" D &D"), dismissed all

counterclaim s against Citigroup, discharged Citigroup as in terpleader plaintiff, and

denied without prejudice Citigroup's request for attorneys' fees and expenses. By order

entered January 24, 2017, after Citigroup filed a new motion for fees and costs, the

district co urt awarded Citigroup fees a nd costs in the amount of $246, 125.15 to be paid

by D&D. The district court found that

, as a matter of law, KLCC had priority over D&D

to the securities account, and assessed fees and costs against D&D as "the losing

claimant." S. App. 47. D&D appeals both the grant of summary judgment and the

award of attorneys' fees and costs to KLCC . We assume the parties' familiarity with the

underlying facts, procedural history, and issues on appeal.

" We review the g rant of . . . summary judgment de novo , accepting as true

the factual allegations of the . . . complaint[] and drawing inferences based upon these

allegations in th e light most favorable to the . . . plaintiffs. " In re Bank of N.Y. Derivative

Litig.

, 320 F.3d 291, 297 (2d Cir. 2003) (alteration in original) (citation omitted).

"Summary judgment is appropriate only if it can be established that 'there is no genuine

issue as to any material fact and that the moving party is entitled to a judgment as a

matter of law.'" Alibrandi v. Fin. Outsourcing Servs., Inc. , 333 F.3d 82, 85 (2d Cir. 2003)

(per curiam) (quoting Fed. R. Civ. P. 56(c)).

In an interpleader action, as a general matter, the interpleader's costs and

attorney s ' fees are awarded from the interpleader fund, but ultim ately they are to be4 " paid by the party whose claim has been adjudged groundless, and whose assertion of

the claim necessitated the interpleader and thereby prevented the successful claimant

from obtaining the fund undiminished by interpleader cos ts." Globe Indem. Co. v. Puget

Sound Co. , 154 F.2d 249, 250 (2d Cir. 1946). The court only deviates from this general

rule when "special circumstances " warrant it. Id. at 251. We review a district court's

award of fees and costs in an interpleader a cti on for abuse of discretion. See

Septembertide Publ'g , B.V. v. Stein & Day , Inc. , 884 F.2d 675, 683 (2d Cir. 1989) ("[ C osts

and attorneys' fees] may, in the discretion of the court, be taxed against one of the

parties when their conduct justifies it

. ")

.

An independent review of the record and relevant case law confirms that

KLCC was entitled to summary judgment for substantially the reasons set forth in the

district court ' s September 28, 2015 memorandum and order

. See Citigroup Glob. Mkts.

,

Inc. v. KLCC Invs. , LLC , No. 06

- CV

- 5466 ( LAP ) , 2015 WL 5853916 , at *7

- 14 (S.D.N.Y.

Sept. 28, 2015) . In addition, we discern no error or abuse of discretion in the district

court's award of fees and costs to Citigroup against D&D.

We have considered all of D&D ' s arguments and find them to be without

merit. Accordingly, we AFFIRM the orders of the district court.

FOR THE COURT:

Catherine O'Hagan Wolfe, Clerk